German Stocks Advance; Metro, Hugo Boss Lead the Gain

Nov. 2 (Bloomberg) -- German stocks advanced, with the
benchmark DAX Index snapping two days of declines, as European
leaders prepared to tell Greece there is no alternative to
budget cuts imposed in the bailout plan.

The DAX advanced 2.3 percent to 5,965.63 at the close in
Frankfurt. The gauge has still fallen 21 percent from this
year’s high on May 2 amid concern global economic growth is
slowing and policy makers are struggling to contain Europe’s
debt crisis. The broader HDAX Index climbed 2.1 percent today.

The DAX fell 5 percent yesterday after Greece’s government
called a referendum on its latest bailout package.

“The decline was immense and for many stocks it wasn’t
justified,” said Pierre Mouton, a fund manager who helps
oversee $7.5 billion at Notz Stucki & Cie. in Geneva. “The
Greek story doesn’t make me very pessimistic. It’s a political
maneuver.”

Euro-area leaders, racing to prevent their week-old debt
crisis strategy from unraveling, are holding emergency talks
today to tell Greece there is no alternative to the budget cuts
imposed in the bailout plan.

Papandreou Summoned

Greek Prime Minister George Papandreou was summoned to
Cannes, France, on the eve of a Group of 20 summit where he will
hear from French President Nicolas Sarkozy that the “only way
to resolve Greek debt problems” is through a deal hammered out
last week in a six-day crisis-management marathon.

At the close of European trading today, U.S. Federal
Reserve policy makers raised their assessment of the economy
while saying “significant downside risks” remain and refrained
from taking any additional steps to ease monetary policy.

“Economic growth strengthened somewhat in the third
quarter, reflecting in part a reversal of the temporary factors
that had weighed on growth earlier in the year,” the Federal
Open Market Committee said. At the same time, it repeated that
“there are significant downside risks to the economic outlook,
including strains in global financial markets.”

The Fed left unchanged its pledge to keep the benchmark
interest rate near zero through at least mid-2013 as long as
unemployment remains high and the inflation outlook stays
“subdued.” The central bank has kept the target federal funds
rate in a range of zero to 0.25 percent since December 2008.

MAN, Metro

MAN jumped 4.9 percent to 63.06 euros after the truck maker
said advance sales contracts for the group, including the main
commercial-vehicle division and diesel-engine and turbine units,
increased 10 percent to 4.1 billion euros ($5.6 billion).

Metro rose 1.4 percent to 33.54 euros. Signa, an Austrian
real-estate company backed by Greek billionaire George Economou,
said it is in discussions with the German retailer, after
Handelsblatt reported that it may buy Metro’s Kaufhof
department-store unit.

Reports today showed German unemployment unexpectedly rose
in October, for the first time in more than two years. The
number of people out of work rose a seasonally adjusted 10,000
to 2.94 million, the Nuremberg-based Federal Labor Agency said.
Economists had forecast a decline of 10,000, the median of 31
estimates in a Bloomberg News survey showed. The adjusted
jobless rate rose to 7 percent from 6.9 percent. A separate
report showed factory output dropped.